Plans for the East West Link tunnel have pushed house prices in Melbourne’s Clifton Hill area into a downward trend from which it will take at least five years to recover, private modelling shows.
The average property price around Alexandra Parade, the arterial road that will form the eastern mouth of the planned 4.4 kilometre tunnel, has fallen almost 11 per cent in the past year to $813,224, from $912,120 in 2013, and is projected to fall as low as $648,918 in 2016, a report by the Secret Agent property consultancy released to the Australian Financial Review said.
The report is based on price movements of houses in similar relative positions to the Burnley Tunnel, built in the late 1990s.
The property market has responded more quickly to planned construction of the East West Link tunnel than with the Burnley Tunnel eight years ago, says the consultancy, which compiled the figures using historical pricing data of dwellings and adjusted it for variations such as number of rooms.
The study focuses on the value of properties in relation to a venting stack, or chimney, that will be erected at the intersection of Alexandra Parade and Gold Street.
This is one of two ventilation stacks planned for the tunnel – the other being at the western end in Parkville – and is likely to affect the value of dwellings in a close radius.
However, since the East West Link plans were published last year, there has been no such discrepancy in prices between the different areas in Clifton Hill.
Properties in both bands have fluctuated equally, but this may be because work on the stack has not yet started, the report says.